Franklin Towne Charter High School and its former CEO agreed to pay nearly $4 million to resolve federal claims that Black applicants were discriminated against in a 2023 admissions lottery.
A Philadelphia charter school and its former chief executive have agreed to pay nearly $4 million to resolve federal allegations that Black applicants were unlawfully disadvantaged during a 2023 admissions lottery.
On September 4, 2026, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced separate settlements with Franklin Towne Charter High School and former CEO Joseph Venditti totaling $3,914,328.77.
The federal government alleged that Franklin Towne manipulated what was supposed to be a random admissions lottery to reduce the chances that Black applicants would be admitted.
The school will pay $3,639,328.77, while Venditti will pay $275,000.
The settlements resolve allegations under the False Claims Act connected to the school’s receipt of federal grant money.
The case raises an important question for public charter schools:
What happens when a school receiving federal funds is accused of manipulating admissions in a way that disadvantages students based on race?
Bottom Line
Franklin Towne Charter High School and its former CEO agreed to pay nearly $4 million to resolve federal claims that the school manipulated its January 2023 admissions lottery in a way that reduced the chances of Black applicants being selected.
The settlement does not amount to a court finding that the school or Venditti violated the law. Both defendants denied the federal government’s allegations, and the Justice Department expressly states that the claims resolved by the settlement remain allegations only.
The school has also made significant governance changes, including replacing its CEO and hiring an independent third party to conduct future admissions lotteries.
Editorial Note
This article examines a civil settlement involving allegations of racial discrimination in public-school admissions.
The U.S. Department of Justice alleged that Franklin Towne Charter High School and former CEO Joseph Venditti manipulated the school’s January 2023 admissions lottery to disadvantage Black applicants.
Those allegations were resolved through settlement.
There has been no judicial determination of liability, and both defendants denied wrongdoing.
New To Education has not independently reviewed the full admissions dataset, lottery software, internal communications, settlement agreements, or all underlying evidence.
This article focuses on the education-law, civil-rights, charter-school, and public-funding issues raised by the case.
This article is provided for educational and informational purposes and does not constitute legal advice.
What Happened
Franklin Towne Charter High School is a public charter high school in Philadelphia.
The federal government alleges that during the school’s January 2023 admissions lottery, Franklin Towne, acting through or at the direction of Venditti, manipulated what should have been a random process to reduce the chances of Black students being admitted.
The Justice Department says the school was receiving federal grants at the time, including funds connected to the Elementary and Secondary Education Act and Elementary and Secondary School Emergency Relief Fund.
Because the school accepted those federal funds, it was required to comply with federal civil-rights obligations.
The federal government contends that the school’s alleged admissions practices violated those obligations and also created liability under the False Claims Act.
Franklin Towne and Venditti separately agreed to settle.
The school will pay approximately $3.64 million.
Venditti will personally pay $275,000.
The settlement amounts were based in part on analyses of the defendants’ ability to pay.
Why Title VI Matters
Title VI of the Civil Rights Act of 1964 prohibits discrimination based on race, color, or national origin in programs receiving federal financial assistance.
That includes public schools, charter schools, districts, colleges, and other educational institutions that receive qualifying federal funds.
The principle is straightforward.
A school accepting federal financial assistance cannot intentionally decide that applicants should receive better or worse treatment because of race.
That remains true whether the institution is a traditional district school or a charter school.
Public charter schools may operate with greater autonomy in some areas, but they do not receive an exemption from federal civil-rights law.
Why the False Claims Act Was Involved
At first glance, a racial-discrimination case may not sound like a False Claims Act case.
But the federal government tied the two together through funding.
When schools receive federal grants, they make certifications and representations about compliance with applicable laws and conditions.
The Justice Department alleged that Franklin Towne received federal money while failing to comply with Title VI’s nondiscrimination requirements.
The federal government therefore pursued the matter through the False Claims Act, which can apply when an entity allegedly obtains federal money while making false or misleading representations about compliance with material legal obligations.
That makes this case broader than admissions alone.
It is also about what schools promise when they accept federal funds.
Why a Random Lottery Matters
Charter-school admissions can become legally complicated when demand exceeds available seats.
Many public charter schools use lotteries because they cannot simply select every student who applies.
The point of a lottery is to create a neutral process.
If every eligible applicant enters the same random system, the school avoids giving individual preference based on favoritism or prohibited characteristics.
The federal allegation here is that the process was not actually random.
According to DOJ, the school manipulated the lottery to reduce the chances of Black applicants being selected.
If proven, that would undermine the central purpose of using a lottery in the first place.
A lottery only protects fairness if the randomness itself is real.
What Earlier Reporting Found
Questions about Franklin Towne’s admissions process first became public in 2023.
The Philadelphia Inquirer reported that a school administrator alleged the lottery had been manipulated to exclude students from ZIP codes with larger Black populations.
The newspaper later analyzed the lottery results and found an extremely low statistical probability that the admissions pattern would have occurred through a truly random process.
Those findings did not themselves establish legal liability.
But they helped bring additional scrutiny to the school’s admissions practices.
The federal investigation later produced the settlement announced this month.
The School and Former CEO Deny Wrongdoing
The settlement does not mean Franklin Towne or Venditti admitted the allegations.
According to The Philadelphia Inquirer, both defendants denied the government’s claims in the settlement documents.
Franklin Towne’s current leadership has also said the allegations involve past admissions practices and do not reflect how the school is currently operated.
That distinction matters.
Settlements can resolve litigation risk without producing a court finding on the merits.
An institution may agree to pay money and change practices while continuing to dispute the underlying allegations.
That is why the proper language is that Franklin Towne agreed to resolve federal claims, not that a court found the school guilty of discrimination.
What Franklin Towne Has Changed
The Justice Department says Franklin Towne has made significant governance changes.
The school replaced its chief executive officer.
It also hired an independent third party to conduct all future admissions lotteries.
Those changes are important because they address the process rather than simply the financial penalty.
An independent lottery administrator can reduce the possibility that school officials manipulate who is selected.
It also creates a clearer record of how the lottery was conducted.
For families, that kind of external oversight can help rebuild confidence in the admissions process.
Why Independent Oversight Matters
Admissions systems become vulnerable when too much control rests with a small number of people.
That is true whether the issue involves charter lotteries, magnet-school admissions, selective programs, scholarships, or college enrollment.
Strong systems use checks.
Who designed the process?
Who runs the lottery?
Who can alter the data?
Who verifies the results?
Who reviews irregularities?
Who keeps records?
If the same person or small group controls every part of the process, errors or intentional manipulation can be harder to detect.
Independent oversight is therefore not just a response to misconduct allegations.
It is a basic governance safeguard.
The Charter-School Angle
This case also highlights one of the tensions built into charter-school policy.
Charter schools are often given greater operational flexibility than traditional district schools.
That autonomy can allow them to innovate.
But public funding also brings public obligations.
Charter schools are still public schools.
They generally must comply with civil-rights laws, admissions rules, financial oversight requirements, special-education obligations, and other legal requirements tied to their status and funding.
Greater autonomy does not mean less accountability.
In fact, autonomy often makes strong governance even more important because fewer day-to-day decisions may be controlled by a central district.
Philadelphia’s Charter Board Is Still Involved
The federal settlement does not necessarily end Franklin Towne’s local regulatory problems.
The Philadelphia school board previously moved toward charter-revocation proceedings because of concerns about the admissions allegations.
According to The Philadelphia Inquirer, those proceedings remain unresolved.
That means the school can face consequences through more than one system.
The federal government addresses federal civil-rights and funding issues.
The local charter authorizer addresses whether the school remains in compliance with the requirements of its charter.
Those are separate forms of accountability.
A federal settlement does not automatically determine what the local board must do.
What This Means for Charter Schools
The lesson for charter schools is broader than race discrimination.
Admissions processes should be transparent, auditable, and difficult to manipulate.
If a school uses a random lottery, it should be able to demonstrate how that lottery was conducted.
That may include written procedures, independent oversight, preserved data, documented applicant pools, clear eligibility rules, and records showing how final selections were made.
Schools should also be careful about using indirect criteria that could be intentionally designed to exclude particular racial or ethnic groups.
A policy does not necessarily become lawful merely because it avoids explicitly writing race into the rules.
Intent still matters.
What This Means for Families
Families applying to charter schools should be able to understand how admissions work.
If demand exceeds available seats, the school should clearly explain how the lottery operates, whether preferences are permitted, how waitlists are created, and how families can raise concerns.
Parents should not need insider knowledge to understand whether their child received a fair opportunity.
Transparency is especially important in publicly funded schools because admission determines access to an educational opportunity financed by taxpayers.
A process that cannot be explained clearly is more likely to lose public trust.
What This Means for School Boards and Authorizers
Charter authorizers have an oversight role even when schools operate independently.
They should examine admissions data when unusual demographic patterns emerge.
A racial disparity does not automatically prove intentional discrimination.
But significant anomalies can justify asking questions.
Are lottery procedures being followed?
Are certain ZIP codes receiving different treatment?
Are applicant records complete?
Are preferences authorized by law?
Can the school reproduce the lottery results?
Oversight should not begin only after a whistleblower or federal prosecutor becomes involved.
The Bigger Picture
The Franklin Towne case arrives during a period of major change in federal civil-rights enforcement.
Federal agencies are paying increased attention to how schools and universities use race in admissions, scholarships, student programs, and other educational decisions.
At the same time, courts continue to define what evidence is needed to prove intentional discrimination.
That makes this case particularly important.
The federal government is not alleging that Franklin Towne used a neutral policy that happened to produce unequal racial outcomes.
It alleges intentional manipulation of the admissions process to reduce Black applicants’ chances.
That distinction matters because intentional racial discrimination remains prohibited under Title VI.
What Happens Next
Franklin Towne and Venditti must comply with the financial terms of their settlements.
The school will continue using an independent third party to conduct future admissions lotteries.
Local charter proceedings may also continue separately.
The federal settlement itself resolves the specific False Claims Act claims described by the Justice Department.
Because the matter ended through settlement, there will be no trial determining whether the federal government’s allegations were ultimately correct.
That makes the governance changes particularly important.
The long-term test will be whether Franklin Towne’s future admissions processes are transparent, genuinely random, and trusted by families.
Why This Matters
Admissions determine who receives access to an educational opportunity.
That makes fairness foundational.
A public school cannot claim to offer equal access if applicants believe the selection process can be quietly manipulated behind the scenes.
Random lotteries exist precisely because demand can exceed capacity and schools need a neutral way to choose among eligible students.
Once people lose confidence in the neutrality of that process, the damage reaches beyond one admissions cycle.
It affects trust in the institution itself.
The Franklin Towne settlement is therefore not simply about a $4 million payment.
It is about whether a public-school admissions process can be trusted to operate the way families were told it would.
Key Takeaways
- Franklin Towne Charter High School and former CEO Joseph Venditti agreed to pay a combined $3,914,328.77 to resolve federal claims involving the school’s 2023 admissions lottery.
- Franklin Towne will pay $3,639,328.77.
- Venditti will pay $275,000.
- The Justice Department alleges that the school manipulated a supposedly random admissions lottery to reduce the chances of Black applicants being admitted.
- Franklin Towne was receiving federal education grants at the time.
- The federal government pursued the case under the False Claims Act because the school allegedly received federal funds while failing to comply with civil-rights obligations.
- The settlement does not include a judicial finding of liability.
- Franklin Towne and Venditti deny the federal allegations.
- The school replaced its CEO and hired an independent third party to conduct future admissions lotteries.
- Philadelphia charter-revocation proceedings involving Franklin Towne remain a separate issue.
Frequently Asked Questions
Was Franklin Towne found guilty of racial discrimination?
No. The school and its former CEO settled the federal claims without a court determining liability. DOJ specifically states that the allegations resolved by the settlement remain allegations only.
How much will the school pay?
Franklin Towne Charter High School will pay approximately $3.64 million, while former CEO Joseph Venditti will pay $275,000.
Why was the False Claims Act involved?
The federal government alleges that Franklin Towne accepted federal education grants while failing to comply with nondiscrimination obligations connected to those funds.
Will Franklin Towne still operate?
The settlement does not close the school. Franklin Towne says operations are continuing normally, although separate local charter proceedings remain unresolved.
Final Thoughts
Admissions systems depend on trust.
Families may disagree about charter schools, selective admissions, lotteries, school choice, or how public education should be organized.
But one principle should be easier to agree on:
If a school tells families that seats will be awarded through a random process, the process should actually be random.
The Franklin Towne case shows why transparency and independent oversight matter.
A lottery should not depend on who has access to the software.
It should not depend on which ZIP code a student lives in.
And it should not depend on whether an administrator prefers one racial group over another.
The federal allegations have not been proven in court.
But the settlement and the school’s governance changes leave a clear lesson for every publicly funded school:
Admissions rules only mean something if families can trust the institution to follow them.
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NTE Coverage Standard
New To Education prioritizes primary government records, court documents, settlement agreements, statutes, official datasets, and original reporting when covering civil-rights and admissions disputes.
An allegation, investigation, settlement, judicial finding, and final judgment are not interchangeable.
In this case, the United States alleged that Franklin Towne Charter High School and former CEO Joseph Venditti manipulated a January 2023 admissions lottery to reduce Black applicants’ chances of admission.
The defendants entered into settlements totaling nearly $4 million but denied the allegations.
There has been no determination of liability.
New To Education also distinguishes intentional discrimination from a neutral policy that produces an unequal racial outcome. Those legal theories are not the same and can involve different evidentiary standards.
This article is provided for educational and informational purposes and does not constitute legal advice.
Sources
U.S. Attorney’s Office, Eastern District of Pennsylvania — September 4, 2026
The Justice Department’s official announcement provides the settlement amounts, federal allegations, funding background, governance changes, and confirmation that there has been no determination of liability.
Read the Justice Department announcement
The Philadelphia Inquirer — September 4, 2026
The Inquirer reported the defendants’ denial of wrongdoing, Franklin Towne’s current leadership response, the role of the former administrator whose allegations brought the issue forward, and the status of local charter-revocation proceedings.
Read The Philadelphia Inquirer report
The Philadelphia Inquirer — May 2023
Earlier reporting examined the 2023 Franklin Towne admissions lottery, ZIP-code patterns, allegations of manipulation, and statistical analysis questioning whether the results were genuinely random.
